Australia’s international student caps ‘will cost billions’

Big business and states join universities in opposing proposed limits

July 5, 2024
A broken piggy bank
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Opposition is mounting to the Australian government’s plan to cap international student numbers, amid parliamentary debate on the proposal.

An analysis by advisory firm SPP has found that a cut of 30,000 to the 130,000-odd overseas enrolments across Victoria’s eight universities would wipe out 14,000 jobs and cost the state A$6.5 billion (£3.4 billion) over three years.

According to a summary of the report, which is based on institutional accounts and trade and research data, international education generates A$11.5 billion in “economic value” for Victoria. On top of tuition fees, spending by each student and their visiting family exceeds A$50,000.

Overseas students comprise almost one-third of enrolments in a university sector that contributes A$28.7 billion in “total economic impact” and produces more than twice as much research and development spending as either government or industry, the analysis found.

“Limiting the entry of international students…risks damaging the economy, vital research and our standing and impact in the region,” said Monash University deputy vice-chancellor Craig Jeffrey.

Meanwhile, the representative body for big business has warned the government not to “cannibalise one of our long-term national advantages” by capping international enrolments.

“We are playing with Australia’s fourth largest export at a time when our economy is on a knife’s edge,” Business Council of Australia chief executive Bran Black wrote in the Australian Financial Review.

“International students accounted for almost a quarter of all GDP [gross domestic product] growth over the year to March 2024. The sector was worth A$48 billion in 2023 and employed over 200,000 people. It’s 48 billion reasons to think twice before we cut too hard.”

International education is South Australia’s largest export, with earnings of A$3.15 billion last year, according to the state government, which backed efforts to disrupt “unscrupulous providers” but warned against institutional caps.

In a submission to the Senate committee considering the proposal, South Australia said it had not experienced the post-Covid surge in international enrolments experienced by its eastern neighbours, and that visa policy changes since last December had caused a 10 per cent decline in its new foreign enrolments.

“There needs to be a long-term perspective on the international education sector and not a reaction to only the current trajectory of growth,” the submission says.

The Group of Eight said the government was “rushing this legislation through parliament without proper consultation”. It said that if its members’ international enrolments were capped at pre-Covid levels, the “potential immediate impact” would be A$5.35 billion and more than 22,500 jobs.

“The government is making a critical mistake by using international students as a scapegoat to manage a short-term spike in migration and ease housing pressure,” said chief executive Vicki Thomson.

Privately, some university executives blame the big research-intensive universities for provoking the government crackdown by allowing their international enrolments to grow unreasonably high. Leaders at some institutions back a common cap on the share of foreign students rather than the bespoke institutional limits proposed by the government.

University of Queensland chancellor Peter Varghese wants foreign enrolments capped at 40 per cent, while Deakin University vice-chancellor Iain Martin suggests 35 per cent and RMIT University vice-chancellor Alec Cameron prefers 33 per cent.

Professor Cameron says a cap of this nature would be preferable to the indiscriminate visa rejections and processing delays experienced since last December.

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